Payday Lenders: The New Loan Sharks

Before World War I, American wage earners who couldn’t make ends meet before their next paycheck relied on an insidious form of loan sharks known assalary lenders. These predators lent money at an illegal rate of interest and without collateral. They often charged annual interest rates in excess of 1,000 percent. State sanctions against salary lenders were not rigorously imposed, and the industry thrived not through the threat of physical violence, but the illusion of a legal obligation.

 

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